‘More needs to be done’: Government’s ‘woefully inadequate’ student loan increase slammed

The government has announced an extra £15 million to help students in England – but this has been slammed as being “woefully inadequate”.

Yesterday, in a rare moment of the government remembering that university students do actually exist, the department for education announced a “cost of living boost” for students. This includes an extra £15m in hardship funding, for universities to provide extra support to students in need, tuition fees will be frozen at £9,250 for the next two years, and student loans will be increasing by 2.8 per cent for next year.

However, this move has been slammed by many student groups and organisations. Jo Grady, general secretary of the UCU said the government “finally” acknowledging student hardship in the face of the cost of living crisis had “taken far too long”.

“The new funds announced today must be made quickly and easily available to those struggling to make ends meet”, she said. “The reality however, is that the government hasn’t yet woken up to the scale of the crisis facing students.”

Grady said high levels of inflation of currently 0ver 10 per cent mean the student loan increase “will barely touch the sides”. She said: “In the context of high inflation, rising energy bills, transport costs, rents, and falling wages today’s 2.8 per cent increase in the maintenance loan will barely touch the sides. We need to see a comprehensive package that boosts student income in the long term and prevents the need for quick fixes which provide no long-lasting security.

“‘Investment in students is an investment in the future of the UK and it is high time ministers revisited the package of support available to students and made it suitable for the times we live in. Sadly, today’s announcement falls short and leaves students financially exposed.”

The NUS similarly spoke about how “the cost-of-living crisis is leaving our student communities on the brink, and that existing support has failed to reach them.” It “welcomed” the investment into university hardship funds, and said: “Ultimately, hardship funds are a quick fix to a long-term problem which has come to a head in the cost-of-living crisis”.

However, it said the government needs to do more to protect students in the long term, and called the 2.8 per cent student loan increase “woefully inadequate”, saying it will leave students “£1,500 worse off” (in real terms, accounting for inflation).

“The government must go further to protect students in the long term, by increasing the value of the maintenance package, implementing a rent freeze and further controls on spiralling student rent, reducing transport costs and increasing the minimum wage for apprentices and young people.

Chloe Field, the NUS’ VP for Higher Education, said on Twitter: “Student loans were already abysmal but students are now £1,500 worse off in real terms. More needs to be done and fast.”

According to Save The Student there are currently just under two million undergrad students in the UK – meaning the £15m investment in university hardship funds amounts to less than £8 per student.

Tom Allingham, Save the Student’s student money expert, called the maintenance loan increase a “devastating blow” to students, and pointed out that, unlike student loans, Universal Credit and state pension rates are both rising with inflation.

Allingham told The Tab: “The 2023/24 Maintenance Loan rates are a devastating blow to struggling students, who will now see their battle with the cost of living crisis intensify next year. Our 2022 National Student Money Survey found that the shortfall between the average Maintenance Loan and the average cost of living is now a staggering £439 every month – an increase of £99 on 2021, and £216 on 2020.

“With Universal Credit and State Pension rates both rising with inflation, and students unable to benefit from the vast majority of the government’s extra cost of living support, this is yet another example of those in power wilfully ignoring the needs of young people in higher education.

“We’re calling on Robert Halfon, Minister for Higher Education, to urgently review this decision and increase maintenance funding above and beyond the rate of inflation to account for years of insufficient growth.”

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